NO. 95-094 INTHESUPREMECOURTOFTHESTATE OFMONTANA 1996

JACK R. TANNERand PATRICIA L. TANNER, FREDERICK MCFARLAND, SHERRIE MCFARLAND, andTHOMASJ. FARRELL,

Plaintiffs, Respondents, and Cross-Appellants,

v. DREAMISLAND, INC., aNevada Corporation, and JUANITA DALY,

Defendants, Appellants, and Cross-Respondents.

APPEAL FROM: District Court of the Twentieth Judicial District,

In and for the County of .Lake~~-T, The Honorable EdMcLean, Judge presiding.

COUNSELOFRECORD:

For Appellants: John M. Morrison, Meloy &Morrison, Helena, Montana For Respondents: James A. Manley, Manley LawOffices, Poison, Montana

Filed: Submitted onBriefs: January 25, 1996 Decided: March 21, 1996Justice Charles E. Erdmann delivered the opinion of the Court.

Defendants appeal from jury findings incorporated into a judgment, order, and permanent injunction issued by the Twentieth Judicial District Court, Lake County. The District Court adopted the jury's special verdict concerning disputed road easements and permanently enjoined defendants from obstructing plaintiffs' use and enjoyment of the easements. Plaintiffs cross-appeal on the issue of attorney fees. Weaffirm in part and reverse in part. The issues onappeal are as follows: 1. What is the effect of the District Court's injunction, issued during the trial, which prevented Daly from obstructing plaintiffs' use and enjoyment of Indian Boulevard? 2. Wasthere substantial credible evidence to support the jury verdict which found road easements bygrant, prescription, and necessity? 3. Did the District Court err in instructing the jury regarding prescriptive easements? 4. Did the District Court abuse its discretion in concluding that anequitable award of attorney fees wasnot proper for either party in this case? FACTS Theparties are adjoining landowners of lake front property on Flathead Lake. The properties are part of Lot 4, Block 2, of the Armo Villa townsite near the town of Big Arm. When the United States government platted the villa sites in 1910 it reserved aforty-foot boulevard called Indian Boulevard between the lots and

the lake shore. This boulevard, like others around the lake, has historically been used for vehicular and foot traffic. In some places the boulevard hasbeen used byadjacent lot owners asalawn

area or for cabin sites or boat houses. In 1932 Lot 4, Block 2, was divided in half. The Mueller Realty Company conveyed the north half to Eugenia Rochester (who also owned anearby island named Dream Island) and the south half to Harry Mueller. Plaintiffs' title derives from Mueller and defendants' title derives from Rochester. The indenture to Rochester reserved: [Al right-of-way for road purposes over and upon the premises herein conveyed, to Harry J. Mueller of Butte, Montana, andto his heirs andassigns, forever, over and upon any and all roads now laid out and heretofore traveled over upon and across said premises, or any portion thereof. The transfer of the south half of Lot 4to Mueller contained an identical easement reservation over and upon the land conveyed to Rochester. In 1959 Juanita Daly and her late husband, Marcus Daly III, purchased the north half of Lot 4 and Dream Island (the Daly property) from the Kirks whothen owned the Rochester property. In 1964 the Dalys conveyed the property to Dream Island, Inc., a solely owned private corporation. In 1965 Ross and Delores Young purchased the south half of Lot 4from the Boetchers whothen owned the Mueller property. The Youngs subdivided the property into

3three smaller lots. These sublots were purchased by plaintiffs'

predecessors and later conveyed to plaintiffs for summer homes. In 1971 Jack andPatricia Tanner purchased the sublot adjacent to the Daly property (the Tanner property). In 1981 Frederick and Sherrie McFarland purchased the sublot adjacent to the Tanner property (the McFarland property). In 1971 Thomas Farrell purchased the third sublot which lies adjacent to the Tanner and McFarland properties (the Farrell property). In 1974 Farrell conveyed his property to the United States to beheld in trust for him as atribal member. The Daly property lies north of the plaintiffs' property except for a small triangle of the McFarland property which is situated north of the Daly property. The Tanner property lies adjacent to and south of the Daly property. TheMcFarland property lies adjacent to and south of the Tanner property. The Farrell property lies adjacent to and southeast of both the Tanner and McFarland properties. The roads at issue are designated asA, Al, A2, B, C, D, E, F, and G. Nowitnesses were found who remembered the property in 1932 but two nearby landowners remembered the property as far back as 1934 or 1935. Sid Walker clearly remembers that the Rochesters and others, including the Tanners' predecessors, used roads Aand G. RedTucker bought nearby property in the mid-1930s and identified road Basthe old county road. Heand other landowners used road Ato get down to road Gonthe boulevard. Hetestified that the

4

### public, aswell as the parties' predecessors, used roads A, B,

andG. Other testimony established that prior residents usedroads A, G,andE. Tanner testified that hehasused roads A,A2, D, E, andG. Mrs. McFarland testified that sheandher husband haveused roads A, B, F, andGandFarrell testified that hehasusedroads A,Al, A2, andG. TheTanners andFarrells testified that they haveused the roads for over twenty years andall parties stated they never sought permission from Daly to use the roads, as they believed permission wasnot necessary. Although Daly objects to plaintiffs using road Aacross her property, sheadmits that sheuses road A

across other people's property without their permission. In 1989 Daly's attorney wrote a letter to the plaintiffs acknowledging that plaintiffs hadaneasementover herproperty for those roads which were in existence in 1932--roads AandG--but that sheintended to rescind her alleged permission to use other roads running across her property. Daly indicated in her letter that sheintended to install afence downthe south boundary ofher property, thereby blocking useof roads B, C,andD. In the fall of 1992, after the plaintiffs had left their property for the season, Daly erected afence around herproperty. Thefence extended nearly to the water, cutting off access to the Farrell property andtoMcFarlands' lake front property, aswell as to their source of water. Thefence madeaccess to the Tanners' cabin difficult andcut Tanners off from their boat house, dock,

5NO. 95-094 INTHESUPREMECOURTOFTHESTATE OFMONTANA 1996

JACK R. TANNERand PATRICIA L. TANNER, FREDERICK MCFARLAND, SHERRIE MCFARLAND, and THOMASJ. FARRELL,

Plaintiffs, Respondents, and Cross-Appellants,

v. DREAMISLAND, INC., aNevada Corporation, and JUANITA DALY,

Defendants, Appellants, and Cross-Respondents.

APPEAL FROM: District Court of the Twentieth Judicial District,

In and for the County of ~La'ke.-:, The Honorable EdMcLean, Judge presiding.

COUNSELOFRECORD:

For Appellants: John M. Morrison, Meloy &Morrison, Helena, Montana For Respondents: James A. Manley, Manley LawOffices, Poison, Montana

Filed: Submitted onBriefs: January 25, 1996 Decided: March 21, 1996Justice Charles E. Erdmann delivered the opinion of the Court.

Defendants appeal from jury findings incorporated into a judgment, order, and permanent injunction issued bythe Twentieth Judicial District Court, Lake County. The District Court adopted the jury's special verdict concerning disputed road easements and permanently enjoined defendants from obstructing plaintiffs' use and enjoyment of the easements. Plaintiffs cross-appeal on the issue of attorney fees. Weaffirm in part and reverse in part. The issues onappeal are asfollows: 1. What is the effect of the District Court's injunction, issued during the trial, which prevented Daly from obstructing plaintiffs' use and enjoyment of Indian Boulevard? 2. Wasthere substantial credible evidence to support the jury verdict which found road easements bygrant, prescription, and necessity? 3. Did the District Court err in instructing the jury regarding prescriptive easements? 4. Did the District Court abuse its discretion in concluding that anequitable award of attorney fees wasnot proper for either party in this case? FACTS Theparties are adjoining landowners of lake front property on Flathead Lake. The properties are part of Lot 4, Block 2, of the Armo Villa townsite near the town of Big Arm. When the United States government platted the villa sites in 1910 it reserved a

2forty-foot boulevard called Indian Boulevard between the lots and

the lake shore. This boulevard, like others around the lake, has historically been used for vehicular and foot traffic. In some places the boulevard hasbeen used byadjacent lot owners asalawn

area or for cabin sites or boat houses. In 1932 Lot 4, Block 2, was divided in half. The Mueller Realty Company conveyed the north half to Eugenia Rochester (who also owned anearby island named Dream Island) and the south half to Harry Mueller. Plaintiffs' title derives from Mueller and defendants' title derives from Rochester. The indenture to Rochester reserved: [A] right-of-way for road purposes over and upon the premises herein conveyed, to Harry J. Mueller of Butte, Montana, andto his heirs andassigns, forever, over and upon any and all roads now laid out and heretofore traveled over upon and across said premises, or any portion thereof. The transfer of the south half of Lot 4to Mueller contained an identical easement reservation over andupon the land conveyed to Rochester. In 1959 Juanita Daly and her late husband, Marcus Daly III, purchased the north half of Lot 4 and Dream Island (the Daly property) from the Kirks whothen owned the Rochester property. In 1964 the Dalys conveyed the property to Dream Island, Inc., a solely owned private corporation. In 1965 Ross and Delores Young purchased the south half of Lot 4from the Boetchers whothen owned the Mueller property. The Youngs subdivided the property into

3three smaller lots. These sublots were purchased by plaintiffs'

predecessors and later conveyed to plaintiffs for summer homes. In 1971 Jack andPatricia Tanner purchased the sublot adjacent to the Daly property (the Tanner property). In 1981 Frederick and Sherrie McFarland purchased the sublot adjacent to the Tanner property (the McFarland property). In 1971 Thomas Farrell purchased the third sublot which lies adjacent to the Tanner and McFarland properties (the Farrell property). In 1974 Farrell conveyed his property to the United States to beheld in trust for him as atribal member. The Daly property lies north of the plaintiffs' property except for a small triangle of the McFarland property which is situated north of the Daly property. The Tanner property lies adjacent to and south of the Daly property. TheMcFarland property lies adjacent to and south of the Tanner property. The Farrell property lies adjacent to and southeast of both the Tanner and McFarland properties. The roads at issue are designated asA, Al, AZ, B, C, D, E, F, and G. Nowitnesses were found who remembered the property in 1932 but two nearby landowners remembered the property as far back as 1934 or 1935. Sid Walker clearly remembers that the Rochesters and others, including the Tanners' predecessors, used roads Aand G. RedTucker bought nearby property in the mid-1930s and identified road Basthe old county road. Heand other landowners used road Ato get down to road Gonthe boulevard. Betestified that the

4public, as well as the parties' predecessors, used roads A, B,

and G. Other testimony established that prior residents used roads A, G, and E. Tanner testified that he has used roads A, A2, D, E, and G. Mrs. McFarland testified that she and her husband have used roads A, B, F, andGand Farrell testified that hehas used roads A, Al, A2, and G. The Tanners and Farrells testified that they have used the roads for over twenty years and all parties stated they never sought permission from Daly to use the roads, as they believed permission wasnot necessary. Although Daly objects to plaintiffs using road Aacross her property, she admits that she uses road A

across other people's property without their permission. In 1989 Daly's attorney wrote a letter to the plaintiffs acknowledging that plaintiffs hadaneasement over her property for those roads which were in existence in 1932--roads Aand G--but that she intended to rescind her alleged permission to use other roads running across her property. Daly indicated in her letter that she intended to install afence downthe south boundary of her property, thereby blocking use of roads B, C, and D. In the fall of 1992, after the plaintiffs had left their property for the season, Daly erected afence around her property. The fence extended nearly to the water, cutting off access to the Farrell property andto McFarlands' lake front property, aswell as to their source of water. The fence made access to the Tanners' cabin difficult and cut Tanners off from their boat house, dock,

5and barbecue pit. The fence was constructed of iron fence posts

and chicken wire and the east end was nailed to the Tanners' boat house. WhenMr. Tanner returned to the property in May 1993, he hired acrew to remove the section of the fence which crossed the boulevard.In March 1993 the Tanners andMcFarlands filed acomplaint in

District Court claiming easements by grant and prescription and seeking aninjunction to prohibit Daly from obstructing the use of their property or their egress and ingress. Plaintiffs requested

a jury trial to determine compensatory, emotional distress, and punitive damages. In September 1993 the District Court granted plaintiffs' motion to join Farrell as a plaintiff who alleged easements by grant, prescription, and necessity. On June 13, 1994, Daly filed a motion for partial summary judgment onthe issues of emotional distress, compensatory damages, and punitive damages. OnJuly 20, 1994, Daly filed amotion for partial summary judgment onthe issue of attorney fees. Plaintiffs subsequently withdrew their claim for emotional distress and on July 22, 1994, the District Court denied Daly's motion for summary judgment on compensatory and punitive damages. The claims for compensatory and punitive damages went to trial on August 30 and 31, 1994. In an August 30, 1994, opinion and order, the District Court concluded asamatter of law that attorney fees were not available to either party. During trial the District Court issued an injunction prohibiting Daly from blocking road G which sits on Indian Boulevard. However, because there was still an issue of the reasonableness or maliciousness of Daly's actions in erecting the fence across the boulevard, the District Court did not want the jury contaminated or Daly prejudiced by knowledge of theinjunction. The parties and the court agreed that the jury's

special verdict form would therefore include the issue of easements

over road G,even though that issue hadalready been decided bythe court as amatter of law. Thejury returned aspecial verdict for the plaintiffs andon September 12, 1994, the District Court entered its judgment and order incorporating the jury verdict. Thejury determined that all plaintiffs had aneasement bygrant over roads A,Al, A2, B, andG. The jury found that Tanner had aprescriptive easement over roads D, E, and G, and that McFarland had aprescriptive easement over roads Eand G. In addition, the jury found that Farrell had a prescriptive easement over road G, as well as an easement by necessity over roads A, Al, and G. The jury awarded compensatory damages in the amount of $166.25 (costs to remove the fence) and determined that no punitive damages should be awarded. On November 2, 1994, the District Court issued its final opinion, order, andpermanent injunction denying the defendants' motion for judgment notwithstanding the verdict and upholding the jury verdict. This appeal and cross-appeal followed. ISSUE 1 What is the effect of the District Court's injunction, issued during the trial, which prevented Daly from obstructing plaintiffs'

use and enjoyment of Indian Boulevard? Ownership of Indian Boulevard is acomplex issue with anumber of different parties, including individual landowners, Lake County,the Confederated Salish andKootenai Tribes, and the United States

government, all claiming ownership interest. The plaintiffs did not allege ownership of the boulevard in their complaint andstated that resolution of that issue wasbeyond the scope of this action. Plaintiffs instead claimed that Daly hadnoright to the exclusive

use of road Gonthe boulevard either because it belonged to the United States government or, if Daly did ownit, it was subject to easements. Onthe second day of trial, and out of the presence of the jury, the District Court concluded as amatter of law that: Until such time as [Daly] has acquired aright to [Indian Boulevard] or permission from acourt of jurisdiction, after serving notice on the Tribe and on the United States Government, and bringing an action with them as parties, she's enjoined from obstructing [road Gonthe boulevard]. In its November 2, 1994, opinion andorder, the District Court clarified this issue: Asto road G,the Court haspreviously ruled, asamatter of law, that ownership of Indian Boulevard cannot be decided without naming the relevant native american tribes and the United States government. However, as between Plaintiffs andDefendants, the jury found that to the extent Defendants claim to have any interest in road G, there is an easement by grant across Indian Boulevard in favor of Plaintiffs which is enforceable against the Defendants' claimed interest. Thus, Defendants and their successors in interest are permanently enjoined bythe Court from obstructing in any way Plaintiffs' use and enjoyment of road G, no matter whom is ultimately decided to be the owner of Indian Boulevard. Daly does not appeal the issuance of the injunction concerning the boulevard, but rather limits her appeal to the easement

9

### determinations. The issuance of the injunction renders the

easement issues asto road Gmoot. Asnoted above, the jury was purposely madeunaware of the fact that the District Court had issued aninjunction during trial concerning Indian Boulevard. The jury therefore addressed the issue ofeasements over road Gduring its deliberation. Since the issuance of the injunction regarding road Gis not before us and since the injunction renders the easements over the boulevard moot, weconclude that areview ofthe jury findings pertaining to easements onroadGis unnecessary. ISSUE2 Wasthere substantial credible evidence to support the jury verdict which found road easements by grant, prescription, and necessity? Wereview ajury's verdict to determine if it is supported by substantial credible evidence. Barthule v. Karman (1994), 268 Mont. 477, 485, 886P.2d 971, 976 (citing Interstate Prod. Credit Ass'n v. DeSaye (1991), 250Mont. 320, 322-23, 820 P.2d 1285, 1287). Substantial evidence is defined as that evidence that a reasonable mindmight accept asadequate to support aconclusion. Headv. Central Reserve Life (1993), 256Mont. 188, 201, 845P.2d 735, 743. Evidence which is inherently weakandconflicting may still be considered substantial. Head, 845 P.2d at 743. When conflicting evidence exists, theweight andcredibility given toit

arewithin the province of the jury. Whiting v. State (1991), 248 Mont. 207, 213, 810 P.2d 1177, 1181. When determining if

10substantial evidence exists, this Court views the evidence in the

light most favorable to the prevailing party. Whitinq, 810 P.Zd at 1181. Easements bv Grant Thejury found that plaintiffs possessed aneasement bygrant

over roads A, Al, A2, andB, based onthe 1932 deed transfers from the Mueller Realty Company to Eugenia Rochester and Harry Mueller. Daly argues on appeal that (1) she was a bona fide purchaser without knowledge of the easements, and (2) there was not sufficient evidence indicating that the above-mentioned roads were those referenced in the 1932 deeds. Daly's first argument fails for two reasons. The deeds in question which refer to the easements were admitted asplaintiffs' exhibits 0CT,and ,1 Dt1at trial. The exhibits, on their face, indicate they were both recorded in the Lake County land records on October 19, 1932. The parties stipulated that the chain of title documents would be admitted into evidence without foundational testimony. Even though Daly argues onappeal that the deeds bears

nosignatures or notary seal, Daly did not object when the exhibits

were admitted into evidence. She cannot nowbe allowed to refute the deeds' authenticity asfailure to object to the issue at trial precludes her from raising the issue onappeal. See Hando v. PPG Industries, Inc. (1995), 272 Mont. 146, 900 P.2d 281; Bridger v. Lake (1995), 271 Mont. 186, 896 P.2d 406. Furthermore, Daly admitted that shewas aware of the roads across her property when

11she and her husband purchased the land, thus she had actual

knowledge of the roads and therefore cannot now claim bona fide purchaser status. With respect to Daly's second argument, she is correct that there is nodirect evidence that roads A, Al, A2, and Bwere those referred to in the 1932 deed. Neither party could find anyone whose memory dated back that far or obtain aerial photographs that old. However, the jury waspresented with circumstantial evidence regarding the roads in question. Twoelderly witnesses, Sid Walker and Red Tucker, testified that roads A and B existed in the mid-1930s and were well-traveled at the time. Walker identified the roads from a1937 aerial photograph and testified that heused road Aas ayoungster to reach the lake. Tucker testified that road Awas used at the time to get down to the boulevard andthat road Bwas the old county road. Furthermore, Daly's attorney admitted in the 1989 letter to the plaintiffs that road Aexisted in 1932. The jury was presented with the evidence and weighed the testimony accordingly. Roads Al and A2 are actually apart of road Aandare merely different forks, both of which lead to road G

on the boulevard. Testimony was received that the public used road Ain the mid-1930s to reach road Gandthat road Bwasthe old county road. Weconclude there was substantial credible evidence to support the jury's finding that plaintiffs possessed aneasement

12by grant over roads A, Al, A2, and B, and therefore affirm that

portion of the jury's verdict. Easements bv Prescription The jury determined that Tanner possessed a prescriptive easement over roads D and E and that McFarland possessed a prescriptive easement over road E. Daly argues that there was no evidence in the record which established that plaintiffs' use of roads Dand Ewas not permissive. Daly relies on a theory of neighborly accommodation alleging there was never any discussion between the parties or their predecessors regarding use of the roads and argues that courtesy by neighbors is not adverse and cannot ripen into aprescriptive easement. Plaintiffs concede that the jury erred in finding a prescriptive easement over road E in McFarlands' favor. The McFarlands did not testify that they used road Eandtherefore they did not establish aprescriptive use of the road. The Tanners, however, claim they were using roads Dand Eadversely under a belief of right based onthe language of the 1932 deeds and argue that the burden wasonDaly to showthat the use waspermissive. To establish aneasement byprescription, the party claiming the easement must show open, notorious, exclusive, adverse, continuous, and uninterrupted use of the easement claimed for the full statutory period of five years. Public Lands Access v. Boone &Crockett (19931, 259 Mont. 279, 283, 856 P.Zd 525, 527 (citing Keebler v. Harding (1991), 247 Mont. 518, 521, 807 P.2d 1354,

131356). The burden is on the party seeking to establish the

prescriptive easement and all elements must be proved. Public Lands Access, 856P.2d at 527 (citing Downing v. Grover (1989), 237 Mont. 172, 175, 772 P.2d 850, 852). Tobeadverse the use of the alleged easement must beexercised under aclaim of right and not

as amere privilege or license revocable at the pleasure of the

owner of the land. Public Lands Access, 856 P.2d at 527 (citing Keebler, 807 P.2d at 1356-57). Such claim must be known to and acquiesced in bythe owner of the land. Public Lands Access, 856 P.2d at 527 (citing Keebler, 807 P.2d at 1357). If the owner shows permissive use, noeasement canbeacquired since the theory of prescriptive easement is based onadverse use. Public Lands Access, 856 P.2d at 527 (citing Rathbun v. Robson (1983), 203 Mont. 319, 322, 661 P.2d 850, 852). Wehave stated that "'where the use of away by aneighbor was by express or implied permission of the owner

. . .continuous use of the wayby the neighbor [is] not adverse and [does1 not ripen into a prescriptive right."' Public Lands Access, 856 P.2d at 528 (quoting Wilson v. Chestnut (1974), 164 Mont. 484, 491, 525 P.2d 24, 27). Roads Dand Ebranch off of road Aand lead to the Tanners' garage which has been there for at least fifty years. Mr. Tanner testified that he has used the roads openly and continuously and without permission for as long ashehas owned his property--over twenty years. The Tanners believed they had aright to use the

14roads based on the language of the 1932 deed and therefore

permission from Daly was unnecessary. The Tanners were under no duty to communicate to Daly they were using the roads under aclaim of right and adversely to her. See Woods v. Houle (1988), 235 Mont. 158, 162, 766 P.2d 250, 252. Daly was aware of the 1932 deeds and their reservation of easements, and was also aware of the Tanners' use of the roads. The Tanners and Daly had unsuccessfully attempted to work out a cooperative maintenance agreement for roads. Daly was therefore

aware of the right created by the deeds and acquiesced in the Tanners' use of the roads for anumber of years. The Tanners established apresumption of adverse use of roads Dand Eunder a claim of right based ontheir 1932 deed. Wehave stated that I"[iln order to overcome [the claim of right1 presumption, thereby saving its title from the encumbrance of aneasement, the burden is onthe defendant to showthat the use

was permissive."' Woods 766P.2d at 252 (quoting Groshean, et al.

v. Dillmont Realty Co. (1932), 92Mont. 227, 239-40, 12P.2d 273, 275). The burden therefore shifted to Daly to present evidence of permissive use in support of her theory of neighborly accommodation. Daly testified asfollows: Q: Now, you would agree, would you not, that you never gave anybody permission to use Roads B, C, D, E, For G? A: I never told them not to.

15

### Q:Well, would youagree that, in your deposition, you

admitted that younever gaveanyonepermission touseany of those roads? A: Right

. . . . 

### Q:Youdidn't, in fact, socialize with them, did you? A: No. Q: Youdidn't have muchcontact at all with them, did YOU? A: No. Q:Youdidn't ever doanything -- A: No. Q: -- that led them to believe that you were granting thempermission? A: No. Thejury waspresented with evidence andweighed thetestimony concerning whether ornot Daly granted permission toplaintiffs to

usethe roads insupport ofhertheory ofneighborly accommodation. Thejury concluded that permissive usehadnot beenestablished. The District Court stated that "there has been anything but neighborly accommodation on the part of Defendants regarding Plaintiffs' useof the roads in question." Weconclude that there wassubstantial credible evidence to support the jury's finding that the Tanners possessed a prescriptive easement over roads DandEandtherefore affirm that portion of thejury's verdict. Wefurther conclude that thejury's finding that McFarland possessed aprescriptive easement over road

16

### Eis not supported bysubstantial credible evidence. Wereverse

that portion of the jury's verdict and remand for further proceedings in that regard. Easements byNecessity The jury determined that Farrell possessed aneasement by necessity over roads AandAl. Daly argues that this issue should not havegoneto the jury andthat noeasements bynecessity were established asamatter of law, citing Schmidv. McDowell (1982), 199Mont. 233, 649P.2d 431. In Issue 2weheld that all of the plaintiffs possessed an easement bygrant over roads A,Al, A2, andB. Wetherefore need not reach the issue of whether Farrell possessed aneasement by necessity over roads AandAl.ISSUE3 Did the District Court err in instructing the jury regarding prescriptive easements? TheDistrict Court instructed the jury asfollows: The use of a neighbor's land based on neighborly accommodation orcourtesy isnotadverse andcannot ripen into aprescriptive easement. Thus, where the useof a right-of-way by aneighbor wasby express or implied permission oftheowner, the continuous useof thewayby the neighbor is not adverse anddoes not ripen into a prescriptive right. The mere use of away for the required time is not sufficient to give rise to the presumption of agrant. Somecircumstances or act, in addition tothe use, tending toindicate that the usewas not merely permissive, is required. Toestablish aneasement byprescription, the burden is onthe Plaintiffs to showseveral elements. Plaintiffs or their predecessors in interest must have used the route openly, notoriously, exclusively, adversely, 17continuously, and uninterrupted for the full statutory

period of five years. Oncethe Plaintiffs establish these elements, adverse use is presumed, andthe burden is then onthe Defendants to show that the use waspermissive. The Plaintiffs andtheir predecessors were under noduty to communicate byword of mouth to Defendants, or their predecessors in interest, that Plaintiffs were using the roadway under a claim of right and adversely to Defendants. Daly argues that onthe onehand the District Court instructed the jury that the use of aneighbor's land based on neighborly accommodation is not adverse and cannot ripen into aprescriptive easement. Yet, onthe other hand, the District Court instructed the jury that adverse use is presumed once the remaining elements for prescriptive easement are established. Daly claims that where the defense is permissive use through neighborly accommodation the presumption of adverse use should not apply. The plaintiffs counter that the presumption of adverse use applies in both express permission and implied permission situations and in any event Daly still hadthe burden to establish permissive use. Theplaintiffs argue that even if the instruction

was improper, it was harmless error because Daly did not come forward with sufficient evidence showing neighborly accommodation

or permissive use. The general rule in Montana is that 111 [ilf the given instructions, when viewed in their entirety, state the correct law applicable to the case, there is no reversible error."' Buhr v. Flathead County (1994), 268 Mont. 223, 235, 886 P.2d 381, 388 18(quoting Walden v. State (1991), 250Mont. 132, 137, 818P.2d 1190,

1193). Wehave stated that 'I'[wlhen examining whether certain jury instructions were properly given or refused, wemust consider the jury instructions in their entirety and in connection with other instructions given and the evidence introduced at trial."' Buhr -r 886 P.2d at 388 (quoting Story v. City Bozeman (1993), 259 Mont. 207, 222, 856 P.2d 202, 211). Weconclude that the jury instruction given by the District Court correctly states the law applicable to the case. The substance of the instruction wastaken from our holdings in Public Lands and Woods and it embodies the requirement that Daly has the burden to present evidence of permissive use. Plaintiffs believed they were using the roads adversely under aclaim of right derived from the 1932 deed and Daly failed to adequately rebut this presumption. Weaffirm the District Court onthis issue. ISSUE 4 Did the District Court abuse its discretion in concluding that

anequitable award of attorney fees wasnot proper for either party in this case? In its July 22, 1994, opinion andorder denying Daly's motion for summary judgment on the issue of compensatory damages, the District Court stated that "should Plaintiffs prevail on their malice claims, equity mayrequire anaward of attorneys' fees under the Fey exception in order to fully compensate Plaintiffs in this action."

19(1990), 245 Mont. 308, 800 P.2d 1053, and urges us to affirm the

District Court's grant of summary judgment in her favor. The longstanding rule in Montana is that absent statutory or contractual authority attorney fees will not beawarded. Howell v. State (1994), 263 Mont. 275, 285, 868 P.2d 568, 574 (citing Goodover v. Lindey's, Inc. (19921, 255 Mont. 430, 445, 843 P.2d 765, 774; Bitney v. School Dist. No. 44 (1975), 167Mont. 129, 137,

535 P.2d 1273, 1277; Ehly v. Cady (1984), 212 Mont. 82, 100, 687 P.2d 687, 696). Our review of adistrict court's legal conclusion that no basis for attorney fees exists is plenary. Howell, 868 P.2d at 574 (citing Steer, Inc. v. Dept. of Revenue (19901, 245 Mont. 470, 474-75, 803 P.2d 601, 603). In isolated instances adistrict court mayaward attorney fees to make an injured party whole under its equity powers. See Stickney v. State (19811, 195 Mont. 415, 636 P.2d 860; Holmstrom Land Co. v. Hunter (1979), 182 Mont. 43, 595 P.2d 360; m. Furthermore, in certain instances in which bad faith or malicious behavior are involved this Court has made an equitable award of attorney fees. SeeMatter of Estate of Lindgren (1994), 268Mont. 96, 102, 885 P.2d 1280, 1284. 1nFOYwecreated anexception to the general rule in order to compensate a party who, through no fault of her own, had been forced to hire anattorney to write and argue amotion to dismiss. Wehave subsequently explained the distinguishing characteristics of w by stating: "The Foy exception has been narrowly drawn and

21HOWeVer, in its August 30, 1994, opinion and order the

District Court concluded that "[tlhis Court hasbeen presented with

no facts which would justify the imposition of attorneys' fees under the Fov exception, and the equitable awarding of attorneys' fees is not proper asto either party in this case." TheDistrict Court further ordered that neither party would be allowed to present evidence of attorney fees to the jury, thus concluding as amatter of law that any compensatory damages which might beawarded would not include attorney fees. Plaintiffs argue that the District Court misconstrued their claim for attorney fees. Plaintiffs rely on Boz-Lew Builders v. Smith (1977), 174 Mont. 448, 571 P.2d 389, and Cate v. Hargrave (1984), 209 Mont. 265, 680 P.2d 952, and argue that when Daly erected the fence and denied them access to their lake shore properties, dock, and boat house, she set in motion asequence of events under which they would inevitably incur attorney fees. Plaintiffs contend that the District Court erred by analyzing the issue under Foy v. Anderson (1978), 176 Mont. 507, 580 P.2d 114, andmaintain that the issue should have gone to the jury aspart of its determination of compensatory damages. Daly counters that the decision of whether or not to award attorney fees involves a question of equity and therefore lies within the discretionary powers of the District Court. Daly argues that resolution of the issue is controlled by Rasmussen v. Fowler

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### is applicable only wheretheaction into which theprevailing party

hasbeenforced is utterly without merit or frivolous." Goodover, 843P.2d at 776 (citing State exrel. Wilson v. Dept. of Natural Resources (1982), 199Mont. 189, 202, 648P.2d 766, 772). Wefirst note that the present case presents neither a statutory nor acontractual basis for the awardof attorney fees. Furthermore, weconclude this casedoesnot fit within anyof the

narrow exceptions to the general rule. TheFovexception is not applicable, asheretheplaintiffs obtained anattorney toinitiate legal action. Theywere not forced to defend wholly frivolous litigation through nofault of their own. Westated in Goodover that "Goodover's position astheplaintiff inthis litigation

. will preclude anawardofattorney's fees under Fey.” 

### Goodover, 843 P.2d at 775. Nor does the exception involving malicious action apply to the present case. Eventhough plaintiffs sought punitive damages due to Daly's alleged malicious conduct, the jury determined that punitive damages should not be awarded. The plaintiffs did not appeal that finding. Plaintiffs' reliance onfate ismisplaced. There weaffirmed the jury's award of attorney fees to Hargrave, a senior water appropriator, whosuffered damagesto adamandheadgate dueto Gate's interference with thedamandheadgate. Cate filed suit for

ajudicial determination astowhether Hargrave waswasting water byfailing to maintain the damandwhether Hargrave wasexceeding

22

### his lawful appropriation ofwater. Weaffirmed thejury's awardof

attorney fees stating: The Hargraves as defendants were compelled to expend substantial sumsof money 

### toprove that which wasobvious to them from the start: their valid senior right to thirteen cubic feet per second of McGregor Creek. w, 680P.2d 957 (emphasis added). Wedistinguish thepresent casefromGatebynoting that here the plaintiffs were not forced to defend afrivolous legal action

nor were the easement rights they claimed asdefinitive asthose associated with Hargrave's senior water right. Finally, while we donot condone Daly's actions in erecting the fence around her property wecannot conclude that suchaction is soreprehensible as to fall in line with our holding inQ.&. In Rasmussenthe plaintiff operated adry-land wheat farm on state leasehold property. Whenthedefendant erected agate across aroad used by Rasmussen to reach the property, Rasmussen filed suit and requested injunctive relief. Wedetermined that a prescriptive easement 

### existed across the road but affirmed the district court's denial of attorney fees. Rasmussen, 800P.2d at 1057.Wehave held that absent anabuse of discretion this Court will not reverse the district court's decision concerning attorney fees. Sagev. Rogers (19931, 257Mont. 229, 242, 048P.2d 1034, 1042 (citing Joseph Russell Realty Co. v. Kenneally (1980), 185 Mont. 496, 505, 605 P.Zd 1107, 1112). The test for abuse of discretion is whether the trial court acted arbitrarily without 23

### employment of conscientious judgment or exceeded the bounds of

reason resulting in substantial injustice. Gaustad v. City of Columbus (1995), 272 Mont. 486, 488, 901 P.2d 565, 567. We conclude that the District Court did not abuse its discretion in determining that anequitable awardofattorney fees wasnot proper for either party in this case. Weaffirm the District Court on this issue.

Justice
Weconcur:

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